Too much debt will leave you in danger of mortgage foreclosure or repossession of your vehicle. If you have a regular income, Chapter 13 bankruptcy protection might offer you a chance regain sound financial footing.

Under Chapter 13 bankruptcy, your creditors agree to a plan that allows you to pay your debts over three to five years. Remaining unsecured debt could be discharged at the end of that period. In most cases, a skilled bankruptcy attorney can ensure you keep your home and car.

Consult our Madison Chapter 13 bankruptcy lawyer if your debt is overwhelming you and you need to find a way out. It might be a way for you to retain your home and possessions, satisfy creditors, and work toward a fresh start.

Qualifying for Chapter 13 Bankruptcy

A Chapter 13 bankruptcy is available to individuals, married couples, and sole proprietorships. According to 11 United States Code § 109(e), anyone whose total debt does not exceed $2,750,000 is eligible for Chapter 13 bankruptcy protection. These limits change periodically, so consult with one of our Madison lawyers to determine whether a Chapter 13 bankruptcy is an option you can consider.

Before an individual files for Chapter 13 bankruptcy, they will participate in credit counseling from an approved agency. If a married couple intends to file for Chapter 13 bankruptcy, both spouses must participate. There are very limited exceptions to the credit counseling requirement, including exigent circumstances which the debtor must explain, or being on active military duty in a combat zone.

Chapter 13 bankruptcy requires you to develop a plan of reorganization which your creditors must approve. The plan does not need to provide for 100 percent repayment of all debt, although you must pay taxes, child support, student loans, and some other obligations in full.

Advantages of a Chapter 13 Bankruptcy

A Chapter 13 bankruptcy is a form of personal bankruptcy that allows you to keep your home and vehicle since it can stop foreclosure or repossession proceedings. Once you file for Chapter 13 protection, creditors cannot start or resume collection efforts without court permission.

A Chapter 13 bankruptcy does not require you to sell your house or other possessions, even if you have significant equity in them. Unsecured debt is discharged at the end of the repayment period, but if you keep your home, you must resume making mortgage payments. In such cases, Chapter 13 bankruptcy protection allows you to catch up on mortgage arrears and prevent foreclosure.

This protection allows you to make payments towards your debts for a period of three to five years. Our Madison attorney will discuss your financial goals with you and develop a plan of reorganization accordingly.

The Practical Aspects of Filing for Chapter 13 Bankruptcy

Your Madison attorney will assist you in filing a Chapter 13 bankruptcy petition along with a proposed plan of reorganization and supporting documents. You must also make monthly payments according to the proposed plan starting in the month you filed the petition, even if creditors have not yet approved your plan.

Upon receiving your petition, the court will appoint a bankruptcy trustee who will oversee your reorganization plan, and you will have a meeting with the trustee and creditors to get their approval. Creditors can object to the plan of reorganization and propose their own, but your legal advisors can defend your proposal and try to persuade reluctant creditors that your plan is the best solution.

Once the creditors have approved the plan of reorganization, you will make monthly payments to the bankruptcy trustee who will then distribute them to your creditors. When you fulfill your obligations for the plan’s term, the court discharges your remaining unsecured debt. You may still have to make payments on remaining secured debt and some other obligations.

Explore a Chapter 13 Bankruptcy with Our Madison Attorney

If you have a steady income but cannot manage your debt, a Chapter 13 bankruptcy might be a viable option for you. Filing for this protection often allows you to keep your important assets while paying down your debts in a reasonable manner.

Do not risk foreclosure or repossession without investigating other options. Contact Gillman, Bruton & Capone today and learn how a Madison Chapter 13 bankruptcy lawyer can be of service. We explore all other options before determining if bankruptcy is the correct choice.